THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JUDY WOODRUFF, HOST: We're having some technical difficulties with that open, but thank you for joining us for INSIDE POLITICS. Well, for John Kerry, it could be the next best thing to winning seven out of nine primary season contests, some much needed, long awaited downtime. After his successes last night, the democratic front-runner is back home in Boston with no public events scheduled. He probably can afford to take a break from the trail at this stage of the game, with Arizona, Delaware, Missouri, New Mexico and North Dakota now in his win column.

John Edwards, on the other hand, clearly feels the need to be out on the stump trying to build on his South Carolina victory. He has campaign stops today in Tennessee and Virginia, which hold primaries next Tuesday.

CNN's Frank Buckley is with Edwards right now in Norfolk.

Hello, Frank.

FRANK BUCKLEY, CNN NATIONAL CORRESPONDENT: Hi there, Judy.

John Edwards wasting no time. In fact, last night we got on the charter and left South Carolina, immediately went to Tennessee, went to Memphis, where he appeared on morning talk shows today and had his first appearance of the day. Right now he's en route to New York, actually, where he's going to attend a couple of fund-raisers and appear on the Dave Letterman show, where he's going to read the "Top 10."

In Virginia here, which is where we are right now, where he had an appearance earlier, just a few moments ago, in fact, ended, he talked about one of the major things of his campaign. Exit polling revealing that the majority of voters who put jobs at the top of their list of candidate qualities picked John Edwards. That theme still a major theme of his stump speech.

(BEGIN VIDEO CLIP)

SEN. JOHN EDWARDS (D-NC), PRESIDENTIAL CANIDIDATE: It's time for us to export American products, not American jobs. Which means we need real environmental protections, labor protections, prohibitions against child labor, prohibitions against forced labor in these trade agreements.

(END VIDEO CLIP) BUCKLEY: Something else also revealed in the exit polling showed that voters who said they're looking for a candidate with the right experience tended to back John Kerry and Wesley Clark. I asked Edwards today how he intended to deal with that perception.

(BEGIN VIDEO CLIP)

EDWARDS: Because I understand their lives. I come from the same place they come from. Most voters don't believe that years in Washington, D.C. is what prepares to be President. What prepares you to be President is, number one, to have the personal qualities of leadership, strength, conviction good judgment, courage of your convictions, character. And second, to be willing to stand up for what you believe in.

(END VIDEO CLIP)

BUCKLEY: So this weekend we've got primaries coming up in Michigan and Washington State. Apparently, Senator Edwards is not going to be going to Washington State. They're still making decisions right now on exactly how to handle Michigan, whether or not to go there, whether or not to spend money there. They're still considering that. It's an hour-by-hour sort of a situation on exactly what they're going to do with Michigan.

For now, Judy, their concentration is on Virginia, where we are right now. And Tennessee. Those contests coming up next Tuesday -- Judy.

WOODRUFF: All right. Both of those states bordering on his home state of North Carolina. Perhaps that helps.

Frank, those exit polls also showed when voters were asked, who do you think is the candidate best able to beat President Bush in November, that John Kerry came out far ahead of Senator Edwards. How is his campaign addressing that?

BUCKLEY: Well, the campaign is aware of that perception out there. And what they say is that they would look at it another way. And that is that South Carolina revealed to them that this is a candidate who can win in the general, in the sense that he appealed to moderate, to conservative voters on the Democratic side.

The kind of people that you have to reach across the aisle to get in a general election. Was able to appeal to African-American voters. Was able to appeal to rural voters. And what they know is that they just have to start getting that message out there. And they said they're going to start working on that a little bit more.

WOODRUFF: All right. Frank Buckley with the Edwards campaign in Norfolk.

Frank, thank you.

Well, Howard Dean's winless campaign has no choice but to look forward. Although he might prefer to think back on his political heyday not that long ago. Dean has events today in Washington State and Wisconsin, two of the states where he is clinging to hope and fighting for survival.

(BEGIN VIDEOTAPE)

HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: In Seattle maybe you should have a little latte, right?

WOODRUFF (voice-over): It will take more than caffeine to revive this campaign. But Howard Dean is pressing on, looking to rebound from nine straight losses, pegging his hopes on coming contests in Michigan and Washington State. Urging disheartened supporters to keep the faith.

DEAN: Do you want a real change or do you just want to change presidents?

WOODRUFF: But coming back at this stage in the game is never easy. Just weeks ago, Dean was a sensation, with legions of adoring fans willing to open their hearts and wallets to his crusade. He was a cover boy, lauded in the press, touted as the all-but-sure Democratic nominee. That was then.

DEAN: We're going to keep going and going and going and going. Just like the Energizer bunny.

WOODRUFF: And so Dean soldiers on, pouring his efforts into Michigan, hoping his union supporters will finally deliver. But conceding the Wolverine State is Kerry country now.

He's giving it his all in Seattle, pushing for a Washington caucus victory on Saturday. And dumping money into Wisconsin, hoping to make it to March 2, when once-Dean friendly states like New York and California hold their contests. And again the outsider who became an insider is an outsider once more. A theme he's flogging hard.

DEAN: And I wanted to know why the top Democratic leadership, including many of my opponents, were giving George Bush a blank check for his unilateral, preemptive, wrong-headed war on Iraq.

WOODRUFF: But so far that message has not borne fruit at the polls. Voters in the nine primaries thus far put Dean near the bottom of their delectability list. They're looking for a win in November, and they weren't convinced the Vermont governor can go all the way.

(END VIDEOTAPE)

WOODRUFF: Dean's campaign chief, Roy Kneel, will join me shortly to talk about strategy for the states ahead.

Wesley Clark is heading into the next round of contests with New fuel to keep him going. Still uncertain -- or rather unofficial vote tallies show Clark narrowly bead John Edwards in yesterday's Oklahoma primary. John Kerry was a close third. Today, Clark is focusing his campaign on next week's Tennessee primary, where the latest poll shows him running a strong second. Al Sharpton is portraying his third place showing in the South Carolina primary as a major victory. He broke into the double digits with 10 percent of the vote. Sharpton has no campaign appearances today.

And a day after dropping out of the race for the White House, Joe Lieberman back home in Connecticut. He thanked supporters who stood by him, despite his winless streak in the primaries and the caucuses.

(BEGIN VIDEO CLIP)

SEN. JOSEPH LIEBERMAN (D-CT), PRESIDENTIAL CANDIDATE: Running for President was a great journey. But it is very good to be home.

(END VIDEO CLIP)

WOODRUFF: While Joe Lieberman never found his campaign footing, John Kerry nimbly has transformed himself from stumbling candidate to front-runner. We now have even better sense of Kerry's appeal to voters from last night's exit polls, as our Bill Schneider explains.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST (voice-over): John Kerry is not a niche candidate. He appeals to all categories of Democrats. That was the key to his five-state victory sweep on Tuesday.

In Delaware for example, Kerry handily carried the African- American vote over Al Sharpton. But he also won a majority of White voters. In Missouri, Kerry proved himself to be the true heir of Dick Gephardt by winning a solid majority of union voters. But he also carried the non-union voters.

The key to Kerry's victory in Arizona was solid support from seniors. But he did almost as well among non-seniors in Arizona. And he carried the Grand Canyon State's large Latino vote.

Kerry's triumph was based on delectability, not ideology. In state after state, he got huge support from voters who said they were looking for the candidate with the best chance of beating Bush. All the other candidates basically rely on niche appeal. Howard Dean is strong among highly educated liberals. So he's focusing his campaign on states where that constituency is strong.

DEAN: Hello Tacoma!

SCHNEIDER: Joe Lieberman did best among Bush Democrats. But there were not enough of those to sustain his campaign.

Al Sharpton tried to corner the African-American vote. He discovered that most black voters weren't voting to get a place at the table. They were voting to get Bush out.

John Edwards won South Carolina with a populist appeal to his fellow southerners. That's a large niche, but not a national one. Wesley Clark got the national security vote. But domestic issues like jobs and health care were far more important to Democrats in those states.

Kerry's competitors now have the problem of overthrowing the front-runner by fighting him from their respective niches.

(END VIDEOTAPE)

SCHNEIDER: Dean, Clark and Edwards portray themselves as political outsiders and Kerry as a Washington insider. But you know, being an insider this year may be actually an advantage. Kerry's national and international experience in world affairs and in national affairs, means that he can match President Bush in stature -- Judy.

WOODRUFF: Hmm. All right. Bill Schneider, thanks very much.

As for President Bush, he's got his hands full with investigations. We'll have the latest on all that ahead.

Up next, running Howard Dean's campaign. A real challenge these days. I'll ask Roy Kneel what, if anything, he can do to return things around.

And later...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I began by telling the President that there was a cancer growing on the presidency. And if the cancer was not removed, the President himself would be killed by it.

(END VIDEO CLIP)

WOODRUFF: ... we'll explain why the '04 race for the White House keeps giving us this political flashback.

This is INSIDE POLITICS, the place for campaign news.

(COMMERCIAL BREAK)

WOODRUFF: Campaigning in Washington state this morning, Howard Dean proved that he can still draw a standing room only crowd. But, can he win any primaries or caucuses? The New man at the helm of Dean's campaign, Roy Kneel, joins me now from Burlington, Vermont.

Roy Kneel, very good to see you. Thanks for talking with me.

ROY NEEL, CEO, DEAN CAMPAIGN: Thanks, Judy. It's good to be here.

WOODRUFF: Your candidate right now as you know is 0 for 9, while John Kerry is over there racking up delegates. He's pulled in something like 650,000 votes, by our count. He's got the momentum. How do you stop this? NEEL: Well, you've got to remember, Senator Kerry has won seven primaries and caucuses, but less than seven percent of the votes are in. I mean, we've got a long way to go.

It takes over 2,100 delegates to sew up this nomination. And Howard Dean is in this race until somebody has a majority of the delegates. There's a long way to go, and we think this race is going to start to turn pretty soon.

WOODRUFF: When is Governor Dean going to win a primary? As you know, he predicted he would do well in South Carolina. He talked about New Mexico. He's made some other predictions.

Somebody said he keeps moving the goal post. When is he going to win one?

NEEL: We're going to win between now and February 17 in Wisconsin. We've got great organizations in Washington State, in Maine, and in Wisconsin. We're going to be up on the air in with a serious campaign in Wisconsin.

We're working hard in Michigan. We've got a great group of people. One hundred staff and hundreds of volunteers out there. I talked to them today and they're pumped up.

And Governor Dean, as you mentioned, is doing great with his appearances, drawing big crowds. This campaign is far from over, and we're very optimistic at this point.

WOODRUFF: So the momentum that we in the press are writing about and talking about, the pictures in the news of victorious John Kerry, you're saying the voters in these states are basically not going to pay attention to all that?

NEEL: Well, of course they're paying attention to it. But this election can turn on a dime. I mean, it hasn't been but a few days ago or a couple of weeks ago that Howard Dean was the big front- runner.

Now Senator Kerry is the dominant front-runner in this race. But this can turn. I think Senator Kerry's lead is broad but thin. And this race is very, very fluid.

WOODRUFF: You and Governor Dean both have referred to John Kerry as the candidate who's taken more special interest money than any other candidate. Are you including President Bush in that?

NEEL: Well, no, of course not. I mean, this is a campaign to dethrone the president that has sold this country down the road to interests like Enron and Halliburton. And every day we keep hearing of another outrageous -- I mean actually insulting incident of cronyism coming out of this White House. And, I mean, the list just goes on and on.

Senator Kerry has a record over the last 16 years, or whatever it is, of having received more special interest money in his campaigns than the other candidates. But the goal here, of course, is to beat President Bush. And we're trying to point out the difference between Howard Dean's record and Senator Kerry's record, and the others. And it's a fair differentiation. I mean, Senator Kerry's been a legislature and Howard Dean has delivered results as governor.

WOODRUFF: But Governor Dean has also accepted, I'm told, somewhere close to $1 million in contributions from lobbyists and lawyers himself.

NEEL: Well, I don't think that number is right. I just don't buy that. But the most important thing in this is, who is delivering the kind of results?

You said earlier in your program that the economy was the driving issue in South Carolina. And, in fact, Senator Edwards had a good night last night and showed that it's way too early to have a coronation for Senator Kerry. I mean, Senator Kerry is vulnerable on this. We have this vague notion of electability.

Senator Edwards and Wesley Clark last night showed that this is not a foregone conclusion. And we're going to be doing the same over this weekend and rolling right into Wisconsin.

WOODRUFF: But are you saying that taking this money from special interests, as you describe them, disqualifies John Kerry for the presidency?

NEEL: No, of course not. And...

WOODRUFF: OK. Well I just wanted to clarify.

NEEL: No. Governor Dean has said very emphatically that if he ends up not being the nominee, he's going to be an enthusiastic supporter of the nominee. Any of the Democrats in this race would be a far better president than the one we have in office right now.

WOODRUFF: All right. Roy Neel, are you feeling heat from some of the labor unions that early on endorsed Governor Dean? The SEIU, the Service Employees International, AFSCME and others, where there was a meeting scheduled tomorrow, we gather it's now been canceled. Are they wholeheartedly behind Governor Dean, still?

NEEL: Yes, we believe they are. I mean, these folks have done a terrific thing. They helped Governor Dean at a critical moment with their endorsement. They have backed that up with hard work out in the field.

Andy Stern will be traveling with Governor Dean in Michigan over the next couple of days. That's the president of the Service Employees Union. And they are with us. They're committed. And they're working hard to see that Governor Dean prevails.

WOODRUFF: One other question about your very good friend and the man you worked for for so long, former Vice President Al Gore. He, of course, has endorsed Governor Dean. Is he going to be out there campaigning for him? NEEL: I believe he will be. He's been campaigning hard in Michigan and other places in the country. He's going to be campaigning for him this Sunday night in Tennessee, where there's a major event.

In fact, that I think Vice President Gore is being honored at a statewide event for Democrats. And he'll be speaking on behalf of Governor Dean at that event.

WOODRUFF: But Governor Dean's not campaigning there? Is that what you're saying?

NEEL: Well, he's not physically there. We're still working on our schedule.

WOODRUFF: All right. Good. Well, Roy Neel running the Dean campaign. Thank you very much. Great to see you.

NEEL: Thanks, Judy.

WOODRUFF: Appreciate it.

NEEL: Thanks.

WOODRUFF: Well, there is a long way to go before any candidate has enough delegates to win the Democratic nomination. Only nine states, as you just heard Roy Neel say, have held primaries or caucuses so far. Delegates are awarded based on a candidate's share of the vote. Oklahoma on this map isn't colored in, because the vote there was too close to call.

Right now, John Kerry leading in the delegate count with 260. This includes super delegates so-called. Howard Dean has 121, followed by John Edwards and Wesley Clark. Joe Lieberman's delegates, most of them super delegates who can support any candidate they want, will now move back to the uncommitted column. And 2,161 delegates needed to win the nomination.

A reopen date is set for those Senate office buildings closed after the discovery of toxic ricin.

Also ahead, President Bush changes his mind about extending the deadline for the panel investigating the September 11 terror attacks.

(COMMERCIAL BREAK)

WOODRUFF: A White House spokesman said today that President Bush supports a two-month extension for the commission investigating the 9/11 terror attacks. The decision marks a reversal for Mr. Bush, who at first resisted the request for more time. The bipartisan panel is scheduled to finish its work on May 27.

But members say they need extra time to examine more evidence. White House political aides were concerned that a potentially critical late summer release of the report could become fodder for the November election campaign. On Capitol Hill, Senate Majority Leader Bill Brist says the Senate office buildings close after the discovery of the deadly toxin ricin will start reopening tomorrow. The Russell Building will reopen tomorrow, and the Hart Building will reopen on Friday. The Dirksen Building, where the toxin was found in a mail room serving Senator Frist's office, is not expected to reopen until Monday. Capitol police say that no one has developed any symptoms related to Rican poisoning, and so far no envelope containing the substance has been found.

A political war has erupted over George W. Bush's long-ago service in the Air National Guard. Coming up, Democratic Party chairman Terry McAuliffe answers Republicans' angry charges that he and others are practicing smear tactics.

And leave it to Dennis Kucinich to see a silver lining in single digits. We'll catch up with his presidential campaign later on INSIDE POLITICS.

(COMMERCIAL BREAK)

(BEGIN VIDEOTAPE)

ANNOUNCER: Wesley Clark marches into Tennessee. But did he get any momentum from last night's apparent victory in Oklahoma?

WOODRUFF: Welcome back. The week-long breather the Democrats have between Iowa and New Hampshire, and again before yesterday's contest, may now seem like a luxury. The next round of Democratic presidential caucuses in Michigan and Washington State are just three days away. The very next day, Maine holds its caucuses. And before you know it, another Tuesday will be upon us. On tap on February 10, primaries in Tennessee and Virginia, states where both John Edwards and Wesley Clark are hoping to gain momentum against front-runner John Kerry. Clark is investing his time and energy in Tennessee after edging Edwards for an apparent win in Oklahoma.

LOTHIAN: Retired General Wesley Clark takes his campaign to the south, kicking off his Tennessee bus tour in Memphis by flipping pancakes at this landmark cafe. Then, as part of a new strategy, aides say, aggressively taking on his opponents.

CLARK: They're criticizing the tax cuts. They voted for them. They're criticizing the war in Iraq. They voted for it.

LOTHIAN: And even more personal, at this tractor company in Jackson.

CLARK: People are worried about the Patriot Act and what it does. And a lot of people are criticizing it. John Edwards, John Kerry both voted for it.

LOTHIAN: A senior Clark adviser tells CNN a more defined field now requires a more direct approach. Clark will visit about a half dozen cities in the volunteer state over the next two days. And hopes to appeal to southern voters by pushing his family values theme. And strike a chord with African-Americans here with issues like affirmative action. Clark, who also picked up second-place finishes in Arizona, New Mexico, and North Dakota, is betting heavily on next Tuesday's Tennessee primary. Much like he did in Oklahoma.

CLARK: I need your support, I need it on the telephone, door-to- door, and on the Internet.

(END VIDEOTAPE)

LOTHIAN: Now, the Clark campaign says that they will be using the Internet more heavily in the coming days. One other note about Clark going after his opponents. At one of the events his aides handed out to the press this page which shows where Kerry and Edwards have voted on these issues. No comment yet from the Edwards and Kerry camp -- Judy.

WOODRUFF: So a distinctly tougher approach from the Clark campaign?

LOTHIAN: Pardon me?

WOODRUFF: I just said a tougher approach from the Clark campaign. All right, summing up Dan Lothian. Thanks very much. We appreciate it. Sorry about the audio difficulty there.

On the heels of John Kerry's five-state win last night, he has formally picked up the endorsement of the nation's second largest teacher's union. The American Federation of Teachers is praising Kerry for his understanding of national security matters. As well as for his record on education. Kerry is spending the day back home in Boston. John Edwards hopes to get the last laugh tonight when he becomes the latest presidential contender to read David Letterman's top ten list. Edwards campaigned in Tennessee and Virginia today after his South Carolina primary victory.

Howard Dean heads to Michigan tonight after appearances in Washington state and Wisconsin today, as he looks forward to the next round of primaries and caucuses. We are told that Dean has such a jam-packed schedule in Michigan tomorrow that he has had to cancel a meeting with union leaders there.

Even as the Democrats continue to choose their candidate to face off against President Bush, the two parties already are going at it tooth and nail. As you heard on INSIDE POLITICS yesterday, Republican National Committee Chairman Ed Gillespie had some tough words for his Democratic counterpart after Terry McAuliffe referred to the president as, quote, "a man who was AWOL from the National Guard."

(BEGIN VIDEO CLIP)

ED GILLESPIE, RNC CHAIRMAN: Well, Terry McAuliffe, unfortunately, has become the John Wilkes Booth of presidential character assassination. I just said, Judy, Terry McAuliffe also said that I questioned Senator Kerry's patriotism and I distorted his record. Terry McAuliffe is flat, dead wrong.

(END VIDEO CLIP)

WOODRUFF: Terry McAuliffe joins us now from Chicago. He's chairman of the Democratic National Committee. The John Wilkes Booth of presidential character assassination?

TERRY MCAULIFFE, DNC CHAIRMAN: Well, Judy, it's sad to see poor Ed Gillespie embarrass himself on national television. The facts are you've seen it in the newspapers this week. George Bush was supposed to have shown up in the Alabama National Guard. He didn't show up. He then went back later and said he made up his time when he went back to Texas. But I'd like you to tell the National Guardsmen today who are in Iraq, who didn't have an option of making their time up later, that they're actually there now, defending our country and they had to be there.

George Bush has a lot of explaining to do. As I said before, when they go after our candidates, when they go after our potential nominee, we are going to fight back harder. You punch us, Judy, we're punching back harder. And we're going to do it with facts. And I know they're embarrassed about it, but the facts are what they are.

WOODRUFF: I don't want to dwell on this but I do want to ask you one other question about it. They point out the president received an honorable discharge. Their point is that wouldn't have happened if he were missing from appointments at his -- at the National Guard.

MCAULIFFE: Judy, the facts are that George Bush skipped over 100 people to get in the Texas Guard because his father was a member of Congress. For him to go out and get an honorable discharge later, had that been an ordinary citizen whose father was not a United States congressman, I doubt that the circumstances would have been the same.

He didn't show up. Let him answer that. The commander this week reiterated that the entire time he was supposed to show up in the Alabama Guard, he wasn't there. He said he made it up later. But you don't have that option. When you're supposed to serve our country, you're supposed to be there.

WOODRUFF: All right. We're going to certainly want to hear from the Bush campaign.

MCAULIFFE: Let's hear from the president.

WOODRUFF: All right, Terry McAuliffe let's turn to the Democrats now. How do you size up the Democratic race?

MCAULIFFE: I've got to tell you, am I excited. You saw what happened last night. Seven contests. All seven contests, Judy, last night, had record turnouts. Look at South Carolina. Double their all-time record. Oklahoma, over 100,000 new voters. We have Arizona, double the turnout. New Mexico, double the turnout. Something's going on. So our message is working. Our candidates are getting their message out.

The Bush administration, serious trouble today, because they've failed America on jobs, health care and education. Something's going on. They don't like what they see with George Bush. They like what they're hearing from the Democrats. I mean, I'm very excited. I never thought we would have these huge turnout numbers but people are coming in record numbers to the polls.

WOODRUFF: All right, you said a few weeks ago that if a candidate had not won a contest by February 3, yesterday, they should reassess their candidacy.

MCAULIFFE: Right.

WOODRUFF: My question to you is have you been on the phone today with Howard Dean, Dennis Kucinich and Al Sharpton?

MCAULIFFE: Well, it's up to the voters to tell the candidates to assess their candidacy. If you're not winning elections you're going to have a tough time putting the money together. I did talk to Joe Lieberman today and I want to commend him on a great race. He represented a part of our party. He did it admirably, honorably and I am so proud of Joe Lieberman. But the other candidates, it's not up to the chairman of the party, it's up to the voters.

WOODRUFF: I'm asking you because of your own statement, though.

MCAULIFE: Right. The candidates, I assume every candidate today is making those key decisions, can they raise money? Can they go on television? Can they pay their staff? Can they put their campaign plan in the air? And if they can't, at the end of the day, Judy, everybody is going to do the right thing. We are going to be unified before you know it. They're all going to do the right thing and support the nominee.

WOODRUFF: How hard is it going to be to stop John Kerry at this point?

MCAULIFFE: Well, clearly he's done very well in these contests. He's appealing to all parts of our party. And you know, different voters across the country. But you know, a month ago, Howard Dean was going to win everything. You know, I tell you in politics a week is a lifetime. Anything could happen. John Edwards had a great night last night. Wesley Clark had a great night. I've got to tell you, it's great for the party.

And I've always said March 10, we'll have a nominee. We have 24 more contests until March 10. This is great for the Democratic party to have all these candidates out representing our party, talking about these issues. Anything could happen. A week is a lifetime.

MCAULIFFE: At the same time, are you having any second thoughts, Terry McAuliffe, about your concept of a so-called front loaded schedule, early calendar where you could end up with a nominee very early in the year open to $100 million worth of attacks, criticism, from the Republican party between then and the Democratic convention?

MCAULIFFE: Judy, the old calendar had three days of voting. Iowa, New Hampshire and Super Tuesday which was a national primary. So the candidates just went from airport to airport. Our new calendar which you saw in full force last night, Iowa, New Hampshire, seven states, South Carolina, Oklahoma, we went out west to Arizona and New Mexico, rural North Dakota. This is a great calendar because every different region of our country has a say.

Next week we go to Virginia and Tennessee. We've got Michigan, Washington state. This shows when you get through this process that you are true national candidate and in the old days if you lost out in New Hampshire you may have been out. Now a candidate can pick one or two states to get their message out. This is great for the party. Great for turnout, great for the general election. If I were George Bush I would be worried to death sitting in the White House today.

All right, Terry McAuliffe, loaded for bear (ph).

MCAULIFFE: All pumped up.

WOODRUFF: We appreciate it. Again we're going to try to get someone from the bush campaign, or perhaps from the White House, to address some of these comments. MCAULIFFE: Get the president out.

WOODRUFF: We appreciate it. Good to see you, terry McAuliffe. Thank you.

From Motown to the Mackinac Straits, it is Michigan's turn in the national political spot light. Coming up on INSIDE POLITICS, the scramble to win Saturday's caucuses in the Great Lakes state.

Also, Congressman Dennis Kucinich looks at the road ahead from way back in the pack.

(COMMERCIAL BREAK)

WOODRUFF: Louisiana Republican Billy Tauzin is giving up the chairmanship of the powerful House Energy and Commerce Committee, which has over site of the pharmaceutical industry.

In a letter to Hose Speak Dennis Hastert, Tauzin attributes the move as well as his decision not to seek re-election to a 14th term to health problems. Congressional sources say Tauzin's decision is part of a strategy to deflect criticism because he is considering a lobbying position for the drug industry. This comes only weeks after Tauzin helped to negotiate new prescription drug benefit for Medicare.

INSIDE POLITICS will be right back.

(COMMERCIAL BREAK)

WOODRUFF: According to a new poll, Saturday's Democratic caucuses in the state of Michigan are shaping up as the latest chance for John Kerry to add to his momentum as the party front runner. "The Detroit News Survey" gives Kerry 56 percent to Howard Dean's 12 percent. John Edwards and Wesley Clark are back in single digits. Some other polls show Edwards a little bit higher than that.

With me to talk more about the race, former Michigan Congressman, former gubernatorial candidate, David Bonier. Good to see you.

DAVID BONIER, FRM. CONGRESSMAN: Nice to be with you, Judy.

WOODRUFF: Thanks very much for being with us.

Right now it looks as if John Kerry has an insurmountable lead in Michigan. How do you sense what's going on in your state?

BONIER: He has a very big lead and not very much time left. But Michigan is a state where you just never know. George Wallace won Michigan one year, so did Jesse Jackson. John McCain beat Bush in a very big upset. Udall beat Carter, I remember that very well. Or he took him to a dead heat.

So you never know in Michigan. And the issue of jobs is going to be front and center in our state.

WOODRUFF: You told me when I talked to you since I saw you in New Hampshire you were looking at all the candidates just a week or two ago. You've settled on one of them. Tell us why.

BONIER: I have. I went to New Hampshire with my wife Judy and we visited and saw and listened to them all. And I've settled on John Kerry -- excuse me John Edwards.

And John Edwards is someone who I can relate to in terms of working-class background. He cares deeply about the jobs issue, especially trade. We've lost so many jobs in Michigan.

And also I like the fact that he has the Southern roots. He has the most populous message out there. He talks about race. He talks about the issue of poverty. And in addition to that, I think he's electable. I think when you take all these candidates and you place them one on one next to George Bush, and that what people are going to look at when they see these debates and see them together, I think John Kerry -- excuse me, John Edwards comes off the best.

WOODRUFF: But how do you account though for John Kerry doing better in all the exit polls that have been done in these nine states when people are asked who's going to stand up best against the president? John Kerry comes out better.

BONIER: They both do well. They both actually have improved. And John Kerry, I must tell you, he's also very much at ease with himself on the stump. And I saw him up in Concord and I was very impressed with his comments and the way he handled the meeting. And he's very relaxed. So he will be a formidable candidate if he indeed is our front runner. Might be a good ticket.

WOODRUFF: Is it that you have a problem with John Kerry?

BONIER: No, I don't. I admire him enormously for what he's done, especially on veterans issues and foreign issues. But I'm not really thrilled about his position on trade. And of course that's very big in Michigan. We lost 170,000 jobs in the last three years.

WOODRUFF: And John Kerry voted...

BONIER: He voted for NAFTA and other positions. And until he's more clear on that issue, I think Michigan will be up for grabs in the fall.

WOODRUFF: Why isn't that hurting him more?

BONIER: Well, I don't think there's been a lot of focus yet on it. And I think in the next three days, four days, there will be much more focus on that issue.

WOODRUFF: What about labor? We think of Michigan, we think of the power of organized labor. Many of the unions worked with Dick Gephardt. He then dropped out of the race. Other unions, the service unions, AFSCME are with Howard Dean. His campaign obviously struggling.

How do you see labor having an effect in these caucuses? BONIER: They will have an effect. They're split, of course. Kerry has the firefighters he picked up, as you just mentioned the teachers, Federation of Teachers, and he has some other organizations, as well. Though retail clerks, I think he picked up the USCW.

Dean, has two of the more big and more powerful unions, AFSCME and SCIU which are very good organizations.

And Kerry has, I think, the best though message in terms of the issue that working people carry about. . Excuse me, Edwards. I cannot get John Edwards and John Kerry -- maybe they ought to meld here. And I think maybe they might at some point in this campaign.

WOODRUFF: But it's Edwards is your point?

BONIER: Yes.

WOODRUFF: All right. David Bonier, former Congressman from the state of Michigan supporting John Edwards, despite polls showing John Kerry running well.

BONIER: Running very well. But we're coming, too.

WOODRUFF: Maybe there will be a surprise?

BONIER: There's 128 delegates. We're going to get some share of that.

WOODRUFF: OK. David Bonier, thanks for coming by.

BONIER: Thank you.

WOODRUFF: We appreciate it, thank you.

Checking the headlines new in our "Campaign News Daily." Dennis Kucinich finished in single digits in every state yesterday but he still sees reasons for optimism. Kucinich says he's making progress. In his words, quote, "We're finally starting to show some movement from the one percent bracket."

He had a little fun with his single digit status last night on "The Late Late Show With Craig Kilborn."

(BEGIN VIDEO CLIP)

REP. DENNIS KUCINICH (D-OH), PRESIDENTIAL CANDIDATE: I was one in Iowa, one in New Hampshire.

CRAIG KILBORN, HOST, "LATE LATE SHOW": Wait, wait, wait. You won?

KUCINICH: One percent.

(LAUGHTER)

(END VIDEO CLIP) WOODRUFF: Having two candidates named John -- and you just saw us wrestling with -- David Bonier and I wrestling that -- and one candidate named Dean in this race has led to a lot of unintended references to John Dean, the one-time star witness during the Watergate scandal. Here's a sample from recent days.

(BEGIN VIDEO CLIP)

REP. NORM HICKS (D), WASHINGTON: We've got to get out to those caucuses on February the 7th. Every one of us, and support for John Dean and show him that Washington state -- excuse me. John Dean? Where the hell did I get -- John Kerry!

LIEBERMAN: New Hampshire's next door neighbor candidates, John Dean and -- no, that's Howard Dean. I was close. Howard Dean and John Kerry.

ROBERT DOLE (R), FRM. SENATOR: People who like Kennedy, loved Ted Kennedy. And he's helped John Dean a lot. I mean, John Kerry a lot.

(END VIDEO CLIP)

WOODRUFF: So see, David Bonier, you're in good company.

Well there won't be any more Joe-mentum in the race for president. Coming up, Bruce Morton looks at some of the reasons why Senator Joe Lieberman's presidential campaign never really caught fire.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. JOE LIEBERMAN (D-CT), FMR. PRESIDENTIAL CANDIDATE: From this campaign that ended yesterday, full of gratitude, and full of hope that together, we can and will build a new and better tomorrow for our beloved state and our beloved country. Thank you, Connecticut.

(END VIDEOTAPE)

WOODRUFF: During that speech to his supporters in Connecticut this afternoon, Senator and now former presidential candidate Joe Lieberman said elections are won in the mainstream, not on either extreme of ideology. Bruce Morton looks back at why Lieberman's campaign went aground.

(BEGIN VIDEOTAPE)

LIEBERMAN: Am I disappointed? Naturally. But am I proud of what we stood for in this campaign? You bet I am.

BRUCE MORTON, CNN CORRESPONDENT (voice-over): Joe Lieberman, 61, has won more elections than he's lost, from prom king at his Stamford, Connecticut high school to three terms in the U.S. Senate. He became a national figure when Al Gore chose him as his running mate four years ago.

AL GORE, FMR. VICE PRESIDENT OF THE UNITED STATES: Ladies and gentlemen, the next vice president of the United States of America, Joe Lieberman.

MORTON: Lieberman said he wouldn't run this time if Gore did. But Gore stayed out and Lieberman jumped in. Then Gore, without telling Lieberman in advance, endorsed Howard Dean.

MORTON: Lieberman is an observant orthodox Jew. In the Senate and on campaign trail he's talked about the important of religion. Criticizing Bill Clinton's relationship with Monica Lewinsky, for instance. Or urging moviemakers to honor traditional values.

LIEBERMAN: I feel as strongly as anything else that there must be a place for faith in America's public life.

MORTON: His children, his wife Hadassah, were part of his campaign, were at the meeting last night when he decided to withdraw. In the campaign, in the Senate, he's been a centrist for gun control, for instance, but for the death penalty.

LIEBERMAN: In this campaign I may not have shouted the loudest, but I'm proud -- but I am proud that I took the toughest positions in support of what I believed was right for our great country. Even when it wasn't popular.

MORTON: But what did him in was less particular issues than the mood of the voters. Lieberman is the voice of calm, of reason. Democrats this year are angry. They really want to beat this president and they want somebody they think will do that. And sensible Joe Lieberman? Resigned. But this is not the end of his life.

LIEBERMAN: I consider myself to be a very lucky man. I have a great family, wonderful friends, and an extraordinary opportunity to serve my beloved country as a United States senator.

MORTON: When you think about it, he is a lucky man. There are lots worse things than not living in what Harry Truman called the great white prison. Bruce Morton, CNN, Washington.

(END VIDEOTAPE)

WOODRUFF: Everyone agrees, Joe Lieberman, a true gentleman. Former California governor Gray Davis has a new job. Part-time actor. We'll go on set for a look at his TV debut and find out what the current governor thinks about Davis' decision to go Hollywood.

(COMMERCIAL BREAK)

RHONDA SCHAFFLER, CNN SR. BUSINESS CORRESPONDENT: Technology stocks got trounced today after a cautious outlook from (UNINTELLIGIBLE), Cisco Systems, and a sales warning from Siena (ph). At the closing bell the Dow Industrials off 33 points. 34 there. And the Nasdaq tumbled 2 1/2 percent. This is the fifth loss in the last six sessions and trims its gains so far this year to less than one percent. Investors shrugging off better than expected economic reports on factory orders and the services sector. That's it from Wall Street. JUDY WOODRUFF'S INSIDE POLITICS continues in a moment.

(COMMERCIAL BREAK)

WOODRUFF: Former California governor Gray Davis has taken a cue from the man who defeated him in last year's recall. Davis has turned to acting. He makes a cameo appearance in an upcoming episode of a network sitcom "Yes, Dear." Davis said he discussed his upcoming TV debut with his one-time opponent and former actor Governor Arnold Schwarzenegger. We don't know what Schwarzenegger advised him to do. But whatever it was, he didn't talk him out of it. That's it for INSIDE POLITICS on this Wednesday. I'm Judy Woodruff. Thanks for joining us. "CROSSFIRE" starts right now.

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